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NEWS BRIEFS for June 21

ECOFIN meeting

The latest headline news includes: EU anti-avoidance tax powers; Microsoft's UK APA issues; and Finnish transfer pricing documentation regulations.

ecofin large

Copyright: European Union

EU gains tax powers under deal that builds on BEPS

   June 21 – EU member states will have the power to tax profits moved to low-tax countries where there is no genuine economic activity under far-reaching rules to curb corporate tax avoidance, the European Commission said in a statement released today.

   "Today's agreement strikes a serious blow against those engaged in corporate tax avoidance. For too long, some companies have been able to take advantage of the mismatches between different member states' tax systems to avoid billions of euros in tax,” said Pierre Moscovici, Commissioner for economic and financial affairs, taxation and customs.

   The measures, under discussion since January 2016, build on the OECD BEPS project and come under the EU's action plan for corporate tax reform in 2016, which was announced in June 2015.

Microsoft responds to media outcry over European tax

   June 21 – Microsoft is fighting back following reports in the British media that the tech company avoided paying £100 million ($147 million) of UK tax.

   Microsoft told TP Week: “Our European business, production and distribution is centralised in Ireland and has been since the early 90s. Microsoft UK earns a commission similar to what a third party would receive for performing marketing services for Microsoft Ireland and pays tax on its income earned in the UK.”

Finnish CbCR draft bill released

   June 21 – Finland’s Ministry of Finance is asking for public comment on a draft bill for country-by-country reporting. The bill would require companies to file master and local files alongside CbCR on financial years on or after January 2016. It is to be effective from January 2017.

   The draft rules include regulations to implement the European Commission’s directive on administrative cooperation.

more across site & bottom lb ros

More from across our site

The UN’s decision to seek a leadership role in global tax policy could be a crucial turning point but won’t be the end of the OECD, say tax experts.
The UN may be set to assume a global role in tax policy that would rival the OECD, while automakers lobby the US to change its tax rules on Chinese materials.
Companies including Valentino and EveryMatrix say the early adoption of EU public CbCR rules could boost transparency of local and foreign MNEs, despite the short notice.
ITR invites tax firms, in-house teams, and tax professionals to make submissions for the 2023 ITR Tax Awards in Asia-Pacific, Europe Middle East & Africa, and the Americas.
Tax authorities and customs are failing multinationals by creating uncertainty with contradictory assessment and guidance, say in-house tax directors.
The CJEU said the General Court erred in law when it ruled that both companies benefitted from Italian state aid.
An OECD report reveals multinationals have continued to shift profits to low-tax jurisdictions, reinforcing the case for strong multilateral action in response.
The UK government announced plans to increase taxes on oil and gas profits, while the Irish government considers its next move on tax reform.
War and COVID have highlighted companies’ unpreparedness to deal with sudden geo-political changes, say TP specialists.
A source who has seen the draft law said it brings clarity on intangibles and other areas of TP including tax planning.